Late in fetal life, the mammalian lung ceases its externally directed (centrifugal) branching and begins to form new branches in an inward (centripetal) direction. This new branching pattern gives rise to chambers that contain the specialized cells of the respiratory epithelium (Pneumocytes Types I and II). Investigations of early lung primordia and other branching organs make it reasonable to suspect that the mesodermal cells surrounding the branched tree play a directing role in the specialization of the epithelium. The proposed experiments are designed to analyze the role of the mesodermal components (mesenchyme) in the new branching pattern and in the formation of the specialized epithelial cell types. Terminal segments of the lung will be removed from mouse fetuses at the onset of centripetal branching. The epithelial component will be isolated and grown in organ culture either without mesenchyme or within mesenchyme from the bronchial region or with mesenchyme from younger stages or other organs. These experiments will determine if the alveolar type of differentiation is independent of mesenchyme or dependent upon mesenchyme that is 1) of lung origin, 2) of branching organs, or 3) predominatly a specific cell type. If mesenchymal cells are involved in lung differentiation, as is expected, the next steps would be to investigate the cellular and molecular bases for the involvement. The epithelial component would be challenged with purified populations of different cell types and the matrix would be analyzed biochemically. Tissue combinations that promote branching would be compared with combinations that suppress centripetal branching. These experiments will provide information on the differentiation of the mature respiratory cell types and relate to survival after premature birth.